Speed was God when we created Pentium: Vinod Dham

In many ways, Vinod Dham, 60, redefined the way people looked at semiconductors that powered computers by leading a group of engineers at Intel in 1993 to develop the Pentium — Intel's first microprocessor with a name. Dham, who famously migrated to the US with $8 in his pocket, tells ET bureau in an exclusive interview that the industry's obsession with faster and power-hungry processors is changing.

Regarded as the 'Father of the Pentium', Dham played an instrumental role in the development of the 'Pentium killer' processor at much smaller rival AMD years later, which , for a few months, was the world's best performing microprocessor. The co-inventor of flash memory and the MD and founder of NEA-Indo US Venture Partners has also invested in a dozen telecom software and web companies like Connectiva, Obopay and Myntra.

Excerpts:

You are known as the father of the Pentium chip. For how long do you think the Moore's Law (drafted by Intel founder Gordon Moore) will remain relevant for the semiconductor industry?

I think the Moore's law will remain applicable for at least a decade more. Chip sizes are today moving to 25 nanometres. More advanced fabs have 17-nanometre technology. But the industry's dynamics have changed completely. It is becoming more and more capital-intensive to afford the next-generation technology.

The chip industry started in 1969. Any industry that goes through a 40-year-lifecycle goes through four stages: early innovation, adoption, rapid deployment and saturation. So, the industry is now commoditised to the point of saturation. It is less about development of chips and more about applying them to devices. It's less about performance.

Speed was God for us when we designed Pentium. All we did was to build the fastest BMW or Lamborghini equivalent of a chip, and you were a hero. Now, its more like building an efficient Prius or a Nano. It may not go very fast but consumes less power. A total paradigm shift has occurred in the chip industry. It is evident with the ARM chips, being used to build new devices. These chips may not run as fast but they can run your iPad or netbook for weeks. That wasn't the case in the 80s and 90s.

How are the microprocessor firms grappling with this change? Chips are bound to consume more power as they pack in more features...

The industry is grappling with change in a very basic way. Instead of just putting a lot of components and functionalities on a piece of silicon, they are making small cores and inserting multiple software in the cores. The software goes into multiple cores and does multiple tasks at the same time.

Earlier, even if I had put a fan or liquid nitrogen, it didn't matter as much, as long as it ran fast. Now, new technologies based on the old battery power is being tested, which can run your computer for over a year, without having to charge. There is enormous amount of innovation happening in labs in creating capacitors that can store charge in the battery for a very long time. Sadly, none of of that innovation is happening in India.

Being an American Indian, what are your views on outsourcing in the backdrop of the Obama visit? Many of your invested companies outsource work to India...

We can't defy outsourcing. It would be like defying Physics. In primary school, we are taught that when beakers are connected to each other, and water is poured in one, it attains the same level in all, no matter how fat or thin other beakers are. And now that the fibre pipes are connected between the world, jobs are going to flow wherever work is done better and cheaper.

Wearing an American hat, I can only think how to innovate better. India outsources more to the US, than the US does to India. The only difference is that India outsources money, while US outsources jobs. The US did not lack in anything. It is just Physics playing its part.

US is not a country. It's like a company. Even though if US President Barack Obama says that outsourcing is not good for US jobs, he can't stop it. Mr Obama is being just politically correct to say that outsourcing is bad. Manmohan Singh was smart in saying that India is not stealing jobs.

Outsourcing can't be stopped. It saves money for the US. Now, its up to the US to decide where to invest this money. CEOs of US technology companies have already told the US political establishment that they will move jobs offshore if tax curbs are there.

Do you see a Pentium or Google emerging out of India soon?

Indian IT is industry is only $60 billion of the world's IT industry of about $750 billion, of which $500 billion is offshorable. It's a dilemma before large firms like TCS and Infosys to change their business models. The IT phenomenon has led us to a point where we wait for someone to tell us what to do and then do a great job of it.

I am sure these companies will change their models and the next Google or Oracle may emerge out of India. India has come to a point of explosion of ideas and it is bound to happen.

Almost 12 of your 20 investments in India have been in the telecom space. Why? Are you looking at other verticals as well?

The cellphone is to India what the computer was to us in the 80s and 90s in America. India has about 650 million mobile subscribers, which is unparalleled in the world except in China. I believe something very bullish is going to happen in the internet space in India.

Right now, there are about 50 million internet users. I think the number may leapfrog in just three months when 3G is launched in India full-fledgedly. India will skip PCs to the dismay of the PC-makers straight into the era of smart computing with mobile phones and tablet phones. 3G may be late but I won't be surprised if 3G is ramping up every three months.

But I will be investing more in companies which empower consumers with technology.